The steps manufacturers are taking to minimize the impact of labor shortages on production, product quality and profitability.
By Vick Vaishnavi, CEO of ETQ, part of Hexagon.
Manufacturers around the globe continue to grapple with chronic labor shortages, an issue compounded by retiring workers, geopolitical factors and changing workforce preferences. Despite recent data on rising unemployment rates across some sectors, current data still indicates a significant labor shortage in U.S. manufacturing. According to the Bureau of Labor Statistics, there are nearly half a million open manufacturing jobs. The monthly gap between manufacturing job openings and hirings has hovered at about 100,000 positions, with more than 60% of employers in a recent survey by the National Association of Manufacturers indicating that attracting and retaining talent is a top concern.
A perfect storm has been brewing for years. While an aging workforce is often cited as the primary cause of the current skilled labor shortage, other factors are at play including shifting immigration policies, a worsening skills gap, a lack of interest in manufacturing jobs among younger generations and other workforce shifts such as the rise in work-from-home options offered by other sectors. Another key factor at play is reshoring, which has boosted the demand for domestic (U.S) manufacturing workers, and has been further exacerbated by the recent changes to U.S. tariff policy.
During the early days of the pandemic, approximately 1.4 million manufacturing jobs were lost and, as the industry recovered, the demand for skilled workers has increased, leading to a labor crisis. In fact, the Manufacturing Institute projects a need to fill four million positions by 2030, with over two million positions potentially remaining open. This shortfall would significantly impact production efficiency, output, quality and profitability for years, as well as have broader economic and supply chain implications.
While the economic factors are considerable, the broader implications of a worsening labor shortage are widespread and severe. According to the ETQ Pulse of Quality in Manufacturing 2025 survey, 70% of U.S. manufacturers report being affected by labor shortages, with 88% indicating that it has compromised product quality. In the same survey, 75% reported experiencing a product recall in the past five years, with nearly half of those costing between $10 million to $49.99 million per incident. Other impacts of the labor crisis that also can exacerbate the issue include:
Manufacturers are getting serious about addressing the labor shortage and turning to technology, workflow and ingenuity to tackle the rising epidemic head on. Following are five strategies manufacturers are employing to address these challenges.
Unfortunately, labor shortfalls in manufacturing are both a symptom and a driver of broader systemic challenges: an aging workforce, shifting workforce preferences, geopolitical and economic challenges. This can have tangible consequences on productivity, product quality and profitability. Fortunately, manufacturers are responding with creative solutions. They are investing in AI and automation, prioritizing quality management, partnering with workforce development programs, and reskilling as needed. Success will be determined by those who take a strategic, intentional approach to embracing technology, education and industry collaboration.
About the Author:
Vick Vaishnavi is CEO of ETQ, part of Hexagon, and is responsible for leading the overall business strategy and operations of ETQ. As a seasoned business and technology leader, he has extensive experience guiding software and other technology firms to industry leadership and business growth.
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